OnLive, the streaming game service, has matured really fast in just five months. I liked the original public release, when it was on just computers, but now it's come to a console that plugs into your TV. I like it.

We've checked out the OnLive pure-streaming gaming system before, but it was always in a…
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To quickly recap, OnLive has a bunch of servers that do all the game rendering remotely, then pipe the resulting video to your console to show on your TV. All button inputs get sent to the cloud and processed; acting as if you were actually sitting in front of a regular console. Buying games on OnLive is cheaper than buying them from retail, but you also get the ability to try out games before you go in. And this MicroConsole is only $99.

I've only played with the MicroConsole for a short time, but from what I've seen, it's the PC/Mac experience ported to your living room. You can use the proprietary low-latency (lower than USB, they say) wireless controller, or the console can support USB-based keyboards, mice, controllers and headsets. They say the drivers are all handled server-side as well. As for minimum internet requirements, you'll need 5Mbps for a 40-inch or larger TV, 4Mbps for 30-40-inch TVs, and 3Mbps for 30-inch or smaller TVs.

Here's what playing it looks like.

It really is pretty great. The combination of a low-latency controller, with the improvements they've made in the OnLive service—as well as my relatively fast Comcast internet connection—make the whole experience on par with modern consoles. You can definitely tell that the overall picture is blurrier, and edges are less defined compared to a regular Xbox 360, and there are sometimes occasional stuttering issues, but it's a solid experience, especially for a box this tiny.

OnLive will clear a big hurdle with the December 2nd launch of the MicroConsole, letting people get the living room console experience in their living rooms. The next major hurdle is getting game publishers to support the platform more than hey have been, which OnLive assures me is happening.

Why OnLive might be the future of gaming

The MicroConsole is a big step, and one that lays the groundwork for a lot of what OnLive is planning for the next year. Because it has 1080p, 60FPS support, there's little need to update the hardware unless there's a major shift in TV requirements. They've got 3D support in there now, just not turned on, as well as Bluetooth headset support, 4 controller support and USB hub support. So the hardware is good enough at sucking down bits to shove onto your TV for the next few years.

Flat-rate gaming is like Netflix Watch Instantly for games

OnLive plans to roll out multiple flat-rate packages for games, sort of like how Hulu Plus and Netflix works for TV and movies. You pay one monthly price, then get unlimited access to as many games as you want. Lower tiers will have older titles (starting at a few months to a year+, depending on popularity), as well as indie games. Higher priced tiers will have unlimited games that launch day-and-date with console releases.

OnLive CEO Steve Perlman says that game publishers understand that there's a dollar figure per household of what the maximum price per month that a gamer will spend on gaming. That number might go down for months where there aren't many releases, but there's a cap there that the consumer places on themselves to budget their spending. Setting the all-you-can-eat price at that point makes the most sense for both the publisher and the consumer.

Wait until it takes advantage of the cloud

Getting on-par with the Xbox 360 and the PS3 in terms of performance and number of games is just stage one for OnLive. Where they can really excel is the fact that all these games are rendered in the cloud, with 2010-level hardware, whereas consoles are using 2005-level hardware. This means that, if so interested, publishers can make incredible-looking and hugely-immersive games that aren't capable of being rendered on consoles—or even powerful home PCs—and do that on a big-ass server farm that's piped to your screen. This is incredible.

Steve tells me that it's something game publishers are looking at, but they're waiting until the OnLive platform gains enough users to make developing these ultra-titles profitable. It's not that OnLive is competing directly with the Xbox 360 or the PS3, it's that they're capable of doing something drastically different and insanely better, if there's software support for it.

Can it be an ultimate streaming box?

I also asked Steve, because the box is already capable of streaming games at such a high resolution and frame rate, if they could theoretically load Netflix, Hulu and other services on there to be an all-around streaming box. His answer? It's not something they're doing yet, but it's a possibility.

And because the box is so really tiny, it's kind of a perfect box to take on vacation, or even on business trips. Imagine having your whole library of games with you, as well as the ability to buy more.

Microsoft's really putting their money into streaming tech and digital downloads. OnLive is a platform that's proving you can do just about everything on the server side and still be competitive for gaming. If they're smart, Microsoft will take a hard look at what OnLive is doing and maybe eat them up for the next Xbox. [OnLive]